Working Paper: NBER ID: w19535
Authors: Soren T. Anderson; Ryan Kellogg; Ashley Langer; James M. Sallee
Abstract: We document a strong correlation in the brand of automobile chosen by parents and their adult children, using data from the Panel Study of Income Dynamics. This correlation could represent transmission of brand preferences across generations, or it could result from correlation in family characteristics that determine brand choice. We present a variety of empirical specifications that lend support to the former interpretation and to a mechanism that relies at least in part on state dependence. We then discuss implications of intergenerational brand preference transmission for automakers' product-line strategies and for the strategic pricing of vehicles to different age groups.
Keywords: automobile brand preferences; intergenerational transmission; consumer preferences; firm strategy
JEL Codes: D43; L13; L62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Parental automobile brand choice (L62) | Adult children's automobile brand choice (L62) |
| Parental automobile brand choice (L62) | Intergenerational state dependence (D15) |
| Parental automobile brand choice (L62) | Direct brand preference inheritance (M37) |
| Children's exposure to parental vehicle (R41) | Children's automobile brand preference (L62) |
| Parental automobile brand choice (L62) | Correlated demographic characteristics (J19) |